China Repo Rate Jumps as Deposit Sale Highlights Cash Shortage
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China’s benchmark money-market rate rose, snapping a 14-day decline, even as the central bank sold treasury deposits at a lower rate than last month when banks faced the worst credit crunch in a decade.
The People’s Bank of China sold 50 billion yuan ($8.2 billion) of six-month deposits on behalf of the Ministry of Finance today at a yield of 5.01 percent, said a trader at a primary dealer required to bid at the auctions. That compares with 6.5 percent at a June 20 sale and 4.8 percent on May 23. The deposits placed with commercial banks provide cash that can be used for lending or other purposes. The PBOC refrained from selling bills or conducting money-market operations today.